In a statement, the company said Merrill Lynch & Co., which owns 20 percent of Ownit, forced the closure by cutting off funding on Dec. 5, the Los Angeles Timesreported. A Merrill Lynch spokesman told the Times and Bloomberg News that statement was misleading but declined to elaborate.

Ownit’s chief executive officer, William Dallas, co-founded First Franklin Financial Corp. in 1981 and bought Ownit with a group of investors in 2003, Bloombergreported. The company originated $5.46 billion in loans in the first half of 2006, up 44 percent from 2005, according to the industry newsletter Nonprime News, Bloomberg reported. Those numbers made Ownit the 11th-largest subprime lender in the United States, news reports said.

Last week another subprime lender, Texas-based Sebring Capital Partners, unexpectedly closed its doors after a major investor reportedly stopped funding the company’s loans and it was unable to find a buyer.